Shady dealings? An Israeli communications company has been accused of having illegal trade ties with Iran,
Ynet learned Friday. The company denies the report. The Defense Ministry is investigating the report.

According to the Bloomberg news agency, cyber surveillance
equipment manufactured by Hod-Hasharon based Allot Communications Ltd was shipped to Tehran through a Denmark-based distributor.

The report alleges that the secret arrangement was in place for years before it was discovered and that the company would ship the goods – an internet traffic monitoring system named "NetEnforcer" – to Denmark, where they were stripped of their original labels and shipped to the Islamic Republic.

The transactions were allegedly mediated by an elusive liaison know to both sides only as "Hossein." It is still unclear who Hossein’s clients were exactly.

Israeli
trade, customs and defense officials said they had no knowledge of the transactions. Trade ties of any kind with Iran are banned under Israeli law.

Allot Communications' offices (Photo: Ido Erez)

Gavriel Bar, head of the Middle East Department at the Industry, Trade and Labor Ministry, said that the Israeli laws prohibiting trade with enemy states are comprehensive: "They cover everything – imports and exports, both direct and indirect. An Israeli company is not allowed to trade with Iran in any way."

'System available online'

"Allot's equipment was sold to a Denmark-based distributor, the same way it is sold to thousands of distributers and tens of thousands of clients worldwide. We have no way of knowing where our equipment ends up. We have no ties with Iran. You can get our equipment online – like on eBay," he said.

The system in question, he added "is an office communications system that helps prioritize incoming and outgoing internet traffic." Bloomberg's report noted that the system has commercial uses as well, but qualified the statement by saying it allows users to intercept emails and even change their content.

Copenhagen authorities claim – according to Bloomberg – to have records of the Iranian transactions, which are legal in Denmark; but Hadar insists that the company "has no technical way of knowing where the equipment ends up – there's no paper trail."

Every distribution contract, he added, "explicitly details the distributer's territorial scope and they are contractually bound to inform us if they exceed it."

Marietje Schaake, a Dutch member of the European Parliament, said that the "digital arms trade (of the EU) needs more scrutiny and regulations."

The fact that such transactions have been taking place under the authorities' radar illustrates the difficulties in blocking such trade. Authoritarian regimes are constantly hungry for intrusive surveillance technologies, which are largely used to use control and oppress their people.

"The fact that the most murderous regimes are using Western technologies for surveillance highlights the fact that the current framework for controlling this dirty trade is not working," Access Executive Director Brett Solomon told the news agency.

Cyber surveillance is a growing industry, with sales ranging $3-$5 billion a year.